Former Air Florida Ends Bankruptcy Term

Saying it will operate a Pennsylvania commuter airline and a Miami air maintenance base, the company that used to call itself Air Florida emerged from Chapter 11 bankruptcy protection on Thursday.

The company, now called Jet Florida Inc., had been supervised for more than two years by U.S. Bankruptcy Judge Sidney Weaver, after suspending operations July 3, 1984.

About 96 percent of the airline`s 5,000 creditors supported Jet Florida`s plan of reorganization, although it will return them only 3 cents on the dollar.

``Everyone made the necessary compromises to get to an agreed plan,`` said Jet Florida bankruptcy lawyer John Olson.

Under Chapter 11 of the U.S. Bankruptcy Code, troubled companies get court protection from creditors until they reorganize their business and propose a plan to pay their debts.

Jet Florida`s plan calls for unsecured creditors to get $700,000 cash plus 20 percent ownership of the new company. They will also divide 200,000 preferred shares of Midway Airlines, which bought the Air Florida name and three planes last year.

Stock in Air Florida, which once traded as high as $17.50, was canceled in the reorganization plan. Shareholders may acquire rights to participate in a future Jet Florida stock offer, however.

Air Florida had assets of $145.2 million and liabilities of $221.4 million when it began court proceedings in mid-1984. It grew rapidly in the early 1980s but built up heavy debts. More than 1,200 employees were left jobless when the Miami-based carrier stopped operating.

Financier J.R.K. Tinkle, Jet Florida`s chairman, said Thursday the company always intended to get back into the airline business. But it lacked a suitable vehicle until acquiring Pocono Airways, of Scranton, Pa., earlier this year.

The 20-year-old commuter carrier feeds passengers from a half-dozen mid- Atlantic cities to Pittsburgh-based USAir. Pocono was bought for a token amount because it was nearly bankrupt. Jet Florida wants to revive Pocono and make it profitable. As of Thursday, Jet Florida had about $2.8 million in working capital, a spokesman said.

In addition to running Pocono, Jet Florida will operate a aircraft maintenance station in Miami, which is expected to open Nov. 1. Tinkle also is trying to organize an airline operation in Florida, he said.

CHART

AIR FLORIDA: WHAT THEY GOT

Here`s what the various parties involved in Air Florida got under the plan approved Thursday: